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You might’ve heard the phrase “everything’s bigger in Texas.” The same could be said about the cost of forming a limited liability company (LLC), which is more expensive than in other states. So, how much does it cost to start an LLC in Texas? The filing fee for a Texas LLC is $300.
Filing fees, certificates of status and business permits are a few examples of what you might face when forming a business in Texas. There are also the ongoing costs of maintaining a registered agent, paying franchise taxes and making LLC amendments.
Below, you’ll find a breakdown of the various formation fees and maintenance expenses associated with LLCs in Texas. You’ll also discover whether it’s worth considering an LLC formation service.
Costs To Start a Texas LLC
There are some required costs and some optional costs to starting an LLC in Texas. The main required one is paying for a certificate of formation (Form 205) with the Texas Secretary of State (SOS).
Optional costs include:
Hiring registered agent services
Working with an LLC formation company
Consulting legal help
Reserving a name before filing (Form 501)
Checking for name availability
Operating under a doing business as (DBA) name (Form 503)
Option #1
Use a Service
Cost: $0 + state fees
Time: 5-10 minutes
Option #2
Do It Yourself
Cost: $0 + state fees
Time: 60 minutes+
Choose a name for your LLC
Select a registered agent
File articles of organization
Create an operating agreement
Create an EIN
Here is a general overview of all these potential costs:
TaskCostLLC Name Reservation$40LLC Name Search$0-$1Registered Agent Services$0-$300Certificate of Formation Filing$25-$750Operating Agreement Creation$0EIN Application$0Assumed Name Certificate$25Business License$0+
Below, you can find a deeper breakdown of how these fees work.
Texas LLC Filing Fees
For most people starting an LLC in Texas, the filing cost is $300. If you’re forming a nonprofit organization, you can reduce this fee to $25. Veteran-owned businesses also qualify for a reduced filing fee. These situations apply to all Texas-based businesses.
If your business is based in another state and operates within Texas, you’re considered a foreign entity. In this case, you’re required to pay $750 for Texas business formation. Out-of-state businesses transacting in Texas are legally obligated to register as foreign LLCs within 90 days using Form 304.
The cost of submitting these forms online and physically is the same. However, you can expect faster results with SOSDirect, which is Texas’ online system for SOS matters.
If you want even faster results, you can pay an additional $25 per document for expedited service. You can also pay an extra $10 to receive certified copies of your LLC formation documents.
Texas LLC Registered Agent Costs
Every business entity in Texas is legally required to have a registered agent. The registered agent is the company’s official point of contact, receiving legal documents on its behalf.
The business owner can be their own registered agent if they are a Texas resident. This route is free. However, you end up sacrificing time reviewing mail. Your physical address also becomes public record, which isn’t ideal for privacy.
Alternatively, you can hire an LLC service provider to be your registered agent. This takes this tedious task off your plate, though it does cost between $100 and $300 usually.
Select a Registered Agent
Texas LLC Business License Costs
You pay for any business licenses on top of the fees of forming your LLC. Each of these licenses varies in cost, starting at $15 and going as high as several hundred dollars.
For a full list of business licensing costs, review the Texas Business Licenses & Permits guide. There are close to 150 pages of potential permits and licenses, so take some time to see if your company needs any of them.
Texas LLC Operating Agreement Costs
An operating agreement is an optional internal document. It lays out the roles and responsibilities of each business owner and explains what is to happen if the business is to collapse in the future.
Given that you don’t submit your operating agreement to the state of Texas, there’s nothing stopping you from creating it yourself using a template from LegalShield or another site. These types of templates are pretty basic, though, so they might not cover your specific business needs. Therefore, some business owners prefer to hire a business lawyer or an LLC service company to make a custom operating agreement for them, which can cost several hundred dollars.
For additional security, you can get your operating agreement notarized to prove that the signatures are authentic. This costs $10.
Ongoing LLC Costs in Texas
Texas law does not require business owners to pay anything to maintain their LLCs year to year. However, if you need to change any information about your business, you must submit the proper documentation, which comes with a filing fee.
Here’s a breakdown of these potential costs:
ChangeFormCostReasonCertificate of amendmentForm 424$150 ($25 for nonprofitsInforms the state of any changes to your businessCertificate of correctionForm 403$15Corrects mistakes made in your business formation or amendment documentsCertificate of mergerForm 621
Form 622
Form 623
Form 624Starting at $300 ($50 for nonprofits)Informs the state of your business merging with anotherChange of registered agent or officeForm 401$15 ($5 for nonprofits)Informs the state of changes to your registered agent or the office of your registered agentRenewal of trade or service markForm 902$25Renews a trademark used by your business every five years*Varies based on type of business and form
Texas LLC Annual Report
Texas requires every business to submit an annual report by May 15 of each year (or face a $50 penalty). These reports are called Public Information Reports (PIRs). PIRs include general information about your business, such as your Employer Identification Number (EIN) and your current owners. There is no cost to filing a PIR.
Texas LLC Franchise Tax
As of Jan. 1, 2024, The Texas LLC Franchise Tax only applies to businesses that earn over $2.47 million in revenue. This is an increase from the previous year’s rate of $1.23 million. This increase came from Senate Bill 3, which resulted in a few additional changes.
Prior to this bill, businesses making below the earnings threshold were required to provide a No Tax Due Report. After Jan. 1, 2024, they no longer have to file this report; they just have to file a standard PIR.
For businesses who make over the $2.47 million earnings threshold, the LLC Franchise Tax rate has a few rules:
Retail and wholesale businesses pay a tax rate of 0.375%.
All other businesses pay a rate of 0.75%.
There is a compensation deduction limit of $450,000 for employee wages. You can take up to this out of your revenue to reduce your owed amount.
Is It Cheaper To Start a Texas LLC Yourself?
Yes, it is cheaper to start an LLC yourself. However, what you don’t pay in money, you end up paying in time and energy. You also literally pay for your mistakes, as you have to pay $15 per correction.
The point of an LLC company is to take these problems out of your hands. Naturally, you need to pay several hundred dollars to get this done, which might be out of the budget of some small business owners.
Here’s a table showing you a quick comparison of the pros and cons of filing yourself vs. using a service:
DIYServiceLower upfront costHigher upfront costHigher chance of mistakesAccuracy guaranteeNo customer supportOngoing customer supportSlower processing timeExpress processing time available
DIY LLC Formation Cost in Texas
If you decide to go the DIY route, the minimum cost of LLC formation is $300. This number includes the cost of filing your paperwork and being your own registered agent.
For DIY LLC formation, follow these steps:
1. Check for Business Name Availability
There are three ways to check if your desired business name is available:
Using the Texas SOSDirect system to look up the name
Mailing the SOS Corporations Section at corpinfo@sos.texas.gov
Or calling the SOS Corporations Section by dialing 512-463-5555 followed by 7-1-1
While option one requires you to pay a $1 convenience fee per search, options two and three are free. If you want to reserve your name or operate under an assumed name, you’ll need to pay $40 or $25, respectively.
There are also three requirements for naming your business in Texas:
It needs to be available (not actively used by another business in the state).
It can’t include state or federal phrases (e.g., FBI or CIA).
It needs to make it clear that you’re an LLC (LLC, L.L.C, Limited Liability Company or something similar in the name).
2. Find a Registered Agent
Every entrepreneur starting a business in Texas must have a registered agent. If you live in the state, you can be your own registered agent. Otherwise, you’ll need to seek registered agent services.
Texas registered agent services are available through all the major business formation providers, such as LegalZoom, Bizee and ZenBusiness. Some of these providers, including Bizee, offer a free year of registered agent services with their paid packages. Otherwise, the cost is usually $100 to $300 per year.
3. File a Certificate of Formation
Once you have your registered agent and confirm the availability of your business name, you’re ready to fill out Form 205: The Certificate of Formation. This certificate is the only required document to start your LLC in Texas.
Here is some of the information it needs to include:
Name of the company
Name and address of the registered agent
Names and addresses of the managers or members
Initial mailing address of the company
Name and address of the organizer
Chosen effective date
After the state approves your application, you can take the last step: getting an EIN.
4. Get an EIN
An EIN is a taxpayer identification number for your business. It’s like a Social Security Number (SSN) for a business entity, identifying it for tax purposes.
To qualify for an EIN, you and your business need to be meet these requirements:
You and your business need to be in the United States.
You need to have an SSN or another valid taxpayer identification number.
You cannot have applied for another EIN on the same day.
If you meet these requirements, you can submit an EIN application for free on the Internal Revenue Service (IRS) website. It usually takes a matter of minutes to get this done and get something back.
Tax Requirements for Texas LLCs
While we recommend keeping up to date with the latest tax data through official Texas resources, here are some simple tax tips to keep in mind:
LLC members are subject to a 15.3% self-employment tax if they form their LLC under a partnership, C corporation or sole proprietorship.
Texas does not have state income tax.
Sales tax permits are required for anyone who sells, rents or leases tangible personal property. You can apply for this permit with the Texas comptroller. Sales tax rates average at 6.25% with an extra 2% depending on the district.
The unemployment insurance tax is the only payroll tax businesses have to pay in Texas.
Texas’ annual reports are due on May 15. Federal tax returns stay the same (January, April, June and September 15).
Franchise tax returns, if applicable, are due on May 15 alongside PIRs.
In sum, Texas has high upfront costs for business formation, but the lack of income tax means high potential savings down the line.
The Bottom Line
The cost of forming an LLC in Texas can vary from $25 to $750, with most people paying $300. If you hire an LLC service to handle this on your behalf, you’ll end up paying several hundred dollars more.
These numbers do not include the extra costs of making corrections, hiring a registered agent or seeking legal assistance. Because of this, it helps to budget more than what you expect for forming a Texas LLC.
Frequently Asked Questions
How much are the filing fees for a Texas LLC?
The average filing fee for a Texas LLC is $300. It costs $25 for nonprofit organizations and $750 for foreign companies.
Do you have to pay franchise tax every year for a Texas LLC?
Businesses that make over $2.47 million need to pay franchise taxes every year. Companies under this threshold do not need to pay these taxes.
What is the total cost to start an LLC in Texas?
If you do everything yourself and just have to pay the state filing fee, the total cost is between $25 and $750 depending on what type of business you are. However, it is easy to go beyond this amount if you hire legal help, pay for name reservation, make an amendment or something else.
Is it worth getting an LLC service to form your Texas LLC?
It is worth getting an LLC service if you want to avoid potential delays and mistakes. LLC services know how to meet each state’s unique requirements, so they can help you get your Texas LLC up and running quickly.
Methodology: Our System for Ranking the Best LLC Formation Services
To provide consumers with objective and accurate information, our credentialed legal experts created a comprehensive rating system for Limited Liability Company (LLC) services. We researched five online LLC, registered agent and trademark registration services, including ZenBusiness, LegalZoom, Swyft Filings, Northwest Registered Agent and Bizee (formerly Incfile).
We conducted a survey in 2024 of 200 professionals who were currently using LLC services or had used LLC services within the past year. We analyzed the results of this survey to determine the following rating criteria:
Features (20%)
Value for Money (25%)
Customer Service (20%)
Usability (25%)
Reputation and Credibility (10%)
Visit the full LLC methodology page for more details on our rating system.
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